Bed Bath & Beyond Store Closings Create Opportunity for Grocers

Shuttered retail stores in desirable locations are a commodity amid scarce store space trend
Marian Zboraj
Digital Editor
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Grocery Outlet
Grocery Outlet has already moved into a shuttered Bed Bath & Beyond store in Pocatello, Idaho.

As Bed Bath & Beyond is in midst of liquidating inventory before it closes all of its stores, more grocers are eyeing the company’s desirable retail space across the nation. 

Bed Bath & Beyond filed for Chapter 11 bankruptcy protection on April 23 after it failed to raise enough money to keep the struggling company alive. The Union, N.J.-based home retailer is planning to close its remaining 360 Bed Bath & Beyond stores and 120 buybuy Baby locations across the United States after previously closing 400 stores over the past year.

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As reported by CNN, Bed Bath & Beyond’s real estate is a precious, scarce resource. There’s been little new retail development since the 2008 financial crisis and the rise of online shopping, and vacancy rates are at historic lows.

“E-commerce scared a lot of people off from building retail,” Brandon Isner, the head of retail research at Dallas-based CBRE, a commercial real estate firm, told CNN. “A lot of great real estate is going to come available into a market where there’s been no vacancies. It will not take long for retailers to occupy those spaces.” Total new commercial retail real estate construction reached a new low in 2022 for the third consecutive year, according to CBRE.

Bed Bath & Beyond has stores in all 50 states, with most locations in population-dense areas in California, Texas, New Jersey and Florida. Plus, the majority of its stores are in the suburbs of midsize and large cities and average around 35,000 square feet – an attractive quality for grocers looking toward more economical smaller formats.

Some of these food retailers include Natural Grocers by Vitamin Cottage and The Fresh Market. Natural Grocers has confirmed with Progressive Grocer that it is planning to open a location in a shuttered Bed Bath & Beyond store in Twin Falls, Idaho. Located at 1933 Fillmore Street, the new store is expected to open late summer/early fall. However, this is subject to the customary construction and permitting processes. According to its website, Natural Grocers already has five locations in the state.

Local news in Massachusetts also reports that The Fresh Market wants to move into  space formerly occupied by Bed Bath & Beyond on Route 9 East in Framingham. The food retailer currently has only one location in the state, a store in Hingham.

Meanwhile, ALDI is in the process of taking over the space formerly held by Bed Bath & Beyond in the shopping center off Harley Strickland Boulevard, in Orange City, Fla. An opening date has yet to be revealed.

Grocery Outlet Bargain Market has already moved into a shuttered Bed Bath & Beyond space. The grocer took over the home retailer’s space at 1732 Hurley Drive, in Pocatello, Idaho. The extreme-value grocery retailer opened its new store on April 6.  

Family-operated Natural Grocers operates more than 160 stores in 21 states. The Lakewood, Colo.-based natural and organic grocer is No. 95 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.Based in Greensboro, N.C., The Fresh Market, operating approximately 160 stores in 22 states, is No. 78 on The PG 100. With about 2,200 stores in 38 states, Batavia, Ill.-based ALDI U.S. employs 45,000-plus associates and is No. 24 on PGs list. Emeryville, Calif.-based Grocery Outlet has more than 400 locations in California, Washington, Oregon, Pennsylvania, Idaho, Nevada, New Jersey and Maryland. The company is No. 70 on The PG 100.